How to Use Groupon to Boost Your Ecommerce Business

CIO — The popular online daily deals site Groupon claims to offer consumers the best deals on places to eat, drink, shop and explore in their local communities.

What many online retailers don't know is that Chicago-based Groupon goes beyond these types of local deals and provides ecommerce business owners with tools and services to cash in on the Groupon craze.

Giving Local Businesses an Online Presence

Launched in November 2008, Groupon leverages collective buying power to offer huge discounts, which are the result of partnering with small business owners who offer the deals. The featured deal—and the business offering it—can be discovered by more than 36 million active Groupon customers through Groupon.com or the mobile Groupon app. For these deals, customers buy the discount certificate and redeem it on their next visit to the business.

The actual cost of running a Groupon is typically a 50-50 split between Groupon and the merchant. For example, if you offer a deal in which consumers spend $25 to get $50 to spend at your restaurant, $12.50 of the deal purchase price goes to Groupon and $12.50 to your business. The promotional value is the responsibility of the merchant.

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Nicholas Halliwell, Groupon's manager of merchant public relations, says the company helps merchant partners structure the best deal and put strategies in place to manage the increase in customers and sales. This includes steps such as setting the right deal price and making sure you have considered what additional staff or stock will be needed.

According to Halliwell, a successful Groupon experience requires planning. "Typically what we see—and what we prepare merchants for&mdasdh;is a lot of customers at the beginning of the redemption phase and a lot toward the end right before the extra value is about to expire," he says.

How Can an Ecommerce Owner Use Groupon?

Without a brick-and-mortar location, an online-only business doesn't fit the bill for a typical Groupon deal, since there's no physical place for customers to visit and redeem the certificate. However, Groupon does offer value for online merchants by going beyond local deals and providing ecommerce business owners with a way to cash in on the Groupon craze.

Study: In-Store Shopping Most Trusted, But Buying Online is Overall Favorite

Groupon Goods, available through the Grouponworks.com site, is a deals program designed for businesses that don't have a local store. This consumer products channel is for buying items such as electronics, beauty, home and garden, toys or even sports items.

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